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Reality Check

Even the best execs can blow it when they lose touch.

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This story appears in the August 2003 issue of Entrepreneur. Subscribe »

How could Internet start-up Webvan spend a billion dollars in two years before going bankrupt without ever turning a profit? Easy, you say. The businesspeople who conceived, implemented and guided Webvan and other famed gaffes were just dumb.

Not so, says Sydney Finkelstein. For Why Smart Executives Fail (Portfolio, $26.95), Dartmouth College business professor Finkelstein and a flock of grad students spent six years studying more than 50 colossal commercial screw-ups. The business leaders were almost always smart and had ample money, information and other resources. To find out what they lacked, researchers interviewed people from CEOs to middle managers at competitors, suppliers and the companies themselves.

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